Dust yet to settle on abatements

Sunday

Jul 29, 2012 at 6:00 AM

Nick Kotsopoulos Politics and the City

The way things are trending, those Worcester property owners waiting to hear from city assessors about their real estate abatement applications may have more than a puncherís chance of getting their property assessment knocked down a bit.

Thatís because 55 percent of the abatement applications reviewed and acted on by city assessors through last Monday have been approved.

According to City Assessor William J. Ford, 383 abatements have been granted and processed, returning $483,927 to taxpayers. Another 14 abatement applications have been approved and are being processed, he said.

In comparison, 323 abatement applications have been denied.

Mind you, 2,395 property owners have challenged their fiscal 2012 assessments by filing for abatements and city assessors have only acted on roughly 30 percent of those applications. But the fact that 55 percent have been approved so far has to provide some hope to those still waiting to hear back on their challenge.

Thatís not to say that the odds are in their favor but, hey, while a puncherís chance may not be much, it is certainly better than no chance at all, as has been the case in other years.

Historically, abatement approval rates donít often run more than 50 percent.

In 2010, for instance, only 34 percent (483) of the 1,432 abatement applications filed were approved, while in 2009 roughly 47 percent (844) of the 1,784 applications were granted, and in 2008 nearly 43 percent (406) of the 952 applications were approved, according to the assessorís office.

Perhaps a better apples-to-apples comparison would be other triennial revaluation years such as this ó those years when the city conducts full field reviews in updating the valuations of all properties.

In 2007, the cityís last triennial revaluation, 58 percent (342) of the 587 abatement applications were approved. In other triennial revaluation years, the approval rate was close to 50 percent; in 2004, 47 percent (196) of the 414 applications were approved, while in 2001, 49 percent (330) of the 679 applications were granted.

Of the 720 abatement applications that have been reviewed and acted on, a majority of them have dealt with residential properties (559), while far fewer commercial, industrial or apartment properties (148) and mixed-use properties (13) have been taken up

Wait until assessors act on the bulk of the 780 abatement applications that were filed for the latter two classes of properties; that is when things should really get interesting.

Why?

Because many of those properties were hit with major increases in their assessments, which, in turn, have caused their tax bills to skyrocket. In comparison, residential property assessments dropped 3.8 percent, on average, compared with the previous year.

Of Worcesterís 2,278 commercial parcels, the assessed valuations of 540 of them went up by 40 percent to 100 percent, while the assessment for 174 commercial properties increased by more than 100 percent.

Meanwhile, of the 598 industrial properties in the city, 101 properties shot up 40 percent to 100 percent, while 60 had their valuations more than doubled.

Just along the business corridor on the Southwest Cutoff, no fewer than 28 business property owners have filed for abatements, and in many instances their property assessments nearly doubled or more.

A business property at 37-69 Southwest Cutoff, for instance, saw its assessment jacked up from $2.1 million to $4 million, for an increase of 92 percent.

Another property at 126 Southwest Cutoff saw its assessed valuation skyrocket from $196,200 to $1 million, for a whopping 433 percent increase, while another business at 182 Southwest Cutoff saw its assessed valuation jump 106 percent, from $347,600 to $717,500.

The Southwest Cutoff isnít the only major commercial corridor in which a number of business owners have filed abatement applications. The same is true along Main Street, Park Avenue, Shrewsbury Street, Southbridge Street, Grafton Street and Chandler Street.

In the downtown, many owners of office buildings have also filed for abatements, as have eight of the 11 major property owners on Front Street.

Many of the abatement applications for those properties have yet to be taken up by the assessors because they were submitted just before the June 25 filing deadline. It will be interesting, though, to see the outcome of all those abatement applications, because some pretty significant bucks will be at stake

The fact that the city has set aside $3 million to fund abatements and exemptions is an indication that city officials are well aware of what is involved. That is underscored by the fact that in the past 11 years the most the city ever paid out on abatements and exemptions was $917,004 in fiscal 2007, followed by $708,649 in fiscal 2009 and $702,389 in fiscal 2011.

Most other years, the city spent less than $500,000 on abatements and exemptions.

City assessors have until Sept. 25 to act on all abatement applications, but that doesnít mean the process will end then.

Those taxpayers whose abatement requests were denied by the assessor will then have until Dec. 25 to file an appeal with the state Appellate Tax Board.

As a result, the city wonít really know the full impact of those appeals until sometime in January, and then the process before the Appellate Tax Board could be a long, drawn-out one.

In other words, it could be months, even years, before the dust settles on all the challenges to last fiscal yearís new property assessments.